Glossary

Defines terms you may encounter when dealing with Medicare or with health care-related issues. Click on a letter below to view the list of words that start with that letter, or scroll down to browse all the words in the glossary.

Incidents or practices which are inconsistent with sound and accepted medical, business, or fiscal procedures.

Activities of Daily Living (ADLs)

Activities that most people perform on a daily basis, include bathing, continence, dressing, eating, toileting, transferring (getting into and out of a bed or chair) and ambulating (walking). The ability to do these activities helps measure a person’s level of dependence and type of care required. Benefits in a long-term care insurance policy may be triggered if the policy holder is not able to do 2 or more ADLs.

Acute

A health condition that is short-term, following the onset of a disease or as a result of a sudden illness or injury.

Administrative Law Judge

An official who has responsibility for making a decision in matters of administrative law. Medicare Administrative Law Judges (ALJs) are assigned to the federal Department of Health and Human Services and make decisions regarding Medicare Parts A, B, C, and D appeals that have passed the initial levels of consideration.

Adult Day Care (ADC)

Daytime, community-based programs for adults with functional impairments or disabilities that provide a variety of health, social and related services. Most ADC programs also offer meals. ADCs enable individuals to remain at home by providing supportive, structured day care, and relieving family members and other caregivers from constant care.

Adult Day Health Care (ADHC)

Daytime care, often offered through a licensed community-based day care program. ADHCs are a type of Adult Day Care [see previous definition, above] that provide more intensive health, therapeutic and social services to those at risk of being placed in a nursing home. They also provide family members and other caregivers relief from constant care.

A notice that a doctor or supplier must give a Medicare beneficiary to sign when the doctor or supplier believes that Medicare will not pay for a particular service or item. (Note: this rule does not apply to services generally known not to be covered by Medicare.) The notice informs the beneficiary why the doctor or supplier believes Medicare will not cover the service or item, and estimated cost, so that the beneficiary can make an informed decision whether to receive the service or item. If no notice is given, and Medicare does not pay for the service, then the beneficiary is not responsible for payment. The ABN is given to beneficiaries with Original Medicare, not to beneficiaries in a Medicare Advantage plan.

Alzheimer's Disease

A progressive neurological disease of the brain that leads to irreversible dementia and the loss of neurons. Alzheimer's disease is characterized by progressive impairment in memory, judgment, decision-making, orientation to physical surroundings, and language.

Amyotrophic Lateral Sclerosis (ALS)

A progressive neurodegenerative disease that affects nerve cells in the brain and spinal cord. People diagnosed with ALS can receive Medicare the first month their Social Security Disability Insurance (SSDI) benefits begin. ALS is often referred to as Lou Gehrig’s Disease.

Annual Election Period (AEP)

Commonly called the “Open Enrollment Period,” the AEP allows Medicare beneficiaries to enroll in or change prescription drug plans and/or Medicare Advantage plans, or return to Original Medicare. The AEP runs from October 15 through December 7. Enrollment changes take effect on January 1. This is the only period during which most people with Medicare can change prescription drug plans.

Appeal

A process used to ask for reconsideration of any decision about Medicare-related health care services. For example, if Medicare doesn't pay for a service a beneficiary received, s/he may appeal. An appeal request is sent in writing to the Medicare health plan or to Medicare if the beneficiary is in the Original Medicare program. There is a formal process that must be followed when filing an appeal. More info: Medicare appeals.

Approved Amount

The amount Medicare determines to be reasonable for a service that is covered under Medicare Part B. Medicare Part B usually pays 80% of the approved amount, and the beneficiary pays a 20% coinsurance. Providers who have agreed to “accept assignment” must accept the approved amount as their payment in full. Other providers who accept Medicare but not assignment, can charge no more than 15% above this amount. The approved amount is sometimes called the "approved charge" or "allowable amount."

Assignment (for people in Original Medicare)

An agreement by the health care provider to accept as payment in full the amount Medicare approves for covered services. Medicare Part B usually pays 80% of the approved charge. A provider who accepts assignment would accept as full payment the 80% from Medicare and the beneficiary’s 20% coinsurance. If a doctor does not accept assignment, by law the doctor cannot charge more than 15% above the approved amount.

Assisted Living Facility (ALF)

A residential care setting that provides personal care services, shopping, housekeeping and transportation to the elderly and some younger people with disabilities. An ALF may also help dispense medications. ALF staff is required to be available to provide such assistance 24 hours/day, 7 days/week, and a physician must be available on call at all times.

Attained Age Rating

A method of pricing insurance policies where the premiums increase as the policyholder ages. This is the most common way that Medigap policies are priced in California. Typically, these plans appear less expensive at younger ages, but can cost considerably more in later years. In addition, the premium will likely go up each year due to rising health care costs, separately from the increase associated with age.

Authorized Representative

Someone who has the legal right to make health care decisions on behalf of another (for example, through a power of attorney) or someone designated to make decisions about enrolling or dis-enrolling from a Medicare Advantage and/or a Medicare prescription drug plan.

Coverage that all 10 Medigap policies (A, B, C, D, F, G, K, L, M and N) must include. Basic Medigap benefits include: coinsurance for hospital days 61-90 and 60 lifetime reserve days; 100% of hospital care beyond the 150 days covered by Medicare, up to a maximum of 365 lifetime days; hospice coinsurance; 20% coinsurance for the Medicare-approved amount of Medicare Part B services (after meeting the annual Part B deductible); and the first 3 pints of blood in each calendar year.

Benchmark Plan

A basic Medicare Part D plan that has a premium below the weighted average of Part D plan premiums in a region. This weighted average premium is determined each calendar year and the plans that qualify are announced by CMS. The Low-Income Subsidy (LIS) covers the premium for beneficiaries in a benchmark plan if they qualify for full subsidy. They are, however, still responsible for small copayments for each covered medication. More info: benchmark plans.

Benefit Period (for Original Medicare)

A benefit period begins the day someone is admitted in a hospital or skilled nursing facility and ends when that person has not received Medicare-covered hospital or skilled nursing care for 60 days in a row. If someone is admitted into a hospital or facility after one benefit period has ended, a new benefit period begins. The beneficiary must pay the inpatient hospital deductible for each benefit period. There is no limit to the number of benefit periods a person may have.

Benefit Trigger

Certain conditions set by long-term care insurance policies that must be met before the benefits start and a person receives payment for his/her claims.

A California law that provides protections similar to those under federal COBRA to employees of smaller firms (with 2-19 employees), their spouses, dependents and domestic partners. CalCOBRA benefits last up to 36 months; CalCOBRA can also be used to extend COBRA if its benefits run out before 36 months. To clarify, this is not in addition to 18 months of COBRA but an extension that provides benefits for a total of 36 months, COBRA and CalCOBRA benefits combined. Premiums are generally 110% of the premium paid by the employer.

California Prescription Drug Discount Program for Medicare Recipients

A program that provides people with Medicare who have no prescription drug coverage the discounted Medi-Cal rate for their prescription drugs. They must ask for it by showing their Medicare card at a participating Medi-Cal pharmacy. This program cannot be used for drugs that are covered by a person’s Medicare Part D prescription drug plan and it is not a substitute for a Part D plan. More info: California Prescription Drug Discount.

California State Disability Insurance (SDI)

A partial wage-replacement insurance plan for California workers administered by the State of California. All SDI programs are State-mandated and funded through employee payroll deductions. SDI provides affordable, short-term benefits to eligible workers.

Catastrophic Coverage (Medicare Prescription Drug Coverage)

The portion of the Part D drug benefit that provides the most complete coverage. Once the Part D countable out-of-pocket costs reach a certain threshold (see Part D plan costs), beneficiaries pay a small cost-sharing (either a coinsurance or copayment, whichever is greater) for covered drug costs until the end of the calendar year. (Note: Expenses that count toward this catastrophic coverage are also referred to as "true out-of-pocket" costs, or TrOOP.)

Catastrophic Coverage (general health insurance)

Insurance coverage that is designed to protect people from financial disaster in the case of a serious medical emergency. It focuses primarily on the most expensive medical care, therefore, smaller expenses such as doctor visits or prescription drugs are usually not covered in catastrophic plans. Instead, these plans often have high deductibles that must be met before the plans begin paying for care. Some of these plans have an annual out-of-pocket maximum where, once a person spends that specified maximum amount, the plan pays all covered expenses beyond that amount.

Centers for Medicare and Medicaid Services
(CMS)

The agency of the federal government that administers the Medicare, Medicaid, and state Children's Health Insurance programs. It is part of the U.S. Department of Health and Human Services.

Claim

A written or electronic request that medical services be paid by Medicare or some other insurance company.

The Consolidated Omnibus Budget Reconciliation Act (COBRA), which legally requires an employer (with 20 or more employees) to continue coverage under the employer's group health plan for a period of time after the death of a spouse, the loss of one’s job, the reduction of work hours, or a divorce. People who elect COBRA may have to pay both their share and the employer's share of the premium, plus a 2% or 3% administrative fee. Cal-COBRA provides California protections which, in certain circumstances, broaden and extend the continuation of coverage of employees beyond the federal COBRA law.

Cognitive Impairment

Decreased function in language, attention, reasoning, judgment and memory to the point of requiring supervision and/or assistance to maintain safety.

Coinsurance

A percentage of the full cost of a covered service or item an insurance company requires the policyholder to pay. In Original Medicare, the beneficiary coinsurance is 20% of the Medicare approved amount for Part B covered services. In a Medicare Part D prescription drug plan, the coinsurance varies depending on how much has already been paid in out-of-pocket in a calendar year.

Community Rating

A method used by Medicare supplement insurance (Medigap) to determine the premium where the premium and any increases are based on the average age of each person in the plan. Therefore, everyone (in the community or state) pays the same premium regardless of their age. The premium can only increase if it is raised for all similar plans in the “community” as defined by the insurance company.

Comprehensive Outpatient Rehabilitation Facility (CORF)

A non-residential facility that allows beneficiaries to receive multidisciplinary rehabilitation services at a single location in a coordinated fashion, by or under the supervision of a physician.

Continuing Care Retirement Communities (CCRCs)

Communities in which people can "age in place." CCRCs often have large campuses that include separate housing for those who live independently, assisted living facilities that offer more support, and nursing homes for those who need skilled nursing care. As a result, people who are relatively active and those who have serious physical and mental disabilities live in close proximity. Residents can move from one housing choice to another as their needs change. CCRCs are also known as life care communities.

Coordination of Benefits (COB) Period

A period of time that applies to people who have end-stage renal disease (ESRD) and employer or union-sponsored health coverage. Once a person becomes eligible for Medicare because of ESRD, they have a 30-month COB period during which the employer or union-sponsored plan is the primary payer for their health coverage and Medicare is the secondary payer, if the person has enrolled in Medicare during their COB. Learn more: Medicare and People with ESRD (PDF).

Copayment

A fixed dollar amount that a person pays when they receive a covered medical service or benefit. In Original Medicare, there are copayments for inpatient hospital, skilled nursing facility stays, and some outpatient services. In Medicare Advantage plans, there may be copayments for doctor visits, other outpatient services, hospital stays and/or emergency care. Some prescription drug plans charge copayments for most of their drugs.

Cost Sharing

Insured’s out-of-pocket payments that include deductibles, coinsurance, and copayments.

Coverage Determination

An official determination of whether or not a Medicare Part D plan will pay for a prescription drug. For instance, a beneficiary can request this from his or her Medicare Drug Plan if the pharmacist says that the drug plan will not cover a specific medication. A coverage determination is usually required as the basis for appeal. More info: Coverage Determinations.

Creditable Coverage

1) Any previous health coverage that can be used to shorten the pre-existing condition waiting period for a Medigap policy. 2) Any prescription drug coverage that is considered at least as good as the standard Medicare prescription drug plan. When Medicare beneficiaries have creditable coverage, they can choose not to enroll in a Medicare Part D plan when they are first eligible and will not have to pay a penalty if they decide to enroll later.

Custodial Care

Non-skilled personal care services, such as assistance with bathing, cooking, walking, and dressing. Custodial care is often referred to as "long-term care" or “personal care” and is not generally covered by Medicare.

A fixed dollar amount that a person must pay for covered benefits before an insurance plan begins to pay. In the case of Medicare Part A, there is a deductible for each benefit period. Medicare Part B has an annual deductible, as do many Part D prescription drug plans. Some Medicare Advantage plans that cover prescription drugs have a separate annual deductible for prescription drugs. These deductible amounts can change every year.

Dementia

The progressive decline in cognitive function due to damage or disease in the body beyond what is expected in normal aging.

Disability (for federal programs, such as Medicare, according to the American Disabilities Act)

A physical or mental impairment that substantially limits one or more of the major life activities of such a person. Note: Social Security and other public programs that offer disability benefits have their own strict definitions of disability and the specific conditions necessary to qualify for benefits.

Disability (for state programs, such as Medi-Cal)

A physical or mental impairment, or perceived impairment, that substantially limits one or more of the major life activities of such a person, or is perceived as limiting one or more such activities.

Donut Hole (Medicare Part D)

Technically called the “coverage gap,” this phase starts when the Initial Coverage Limit is reached and ends when the Catastrophic Coverage phase begins. Originally, beneficiaries paid 100% of their drug costs in the “donut hole.” Due to health care reform, however, starting January 1, 2011, beneficiaries received a 50% discount on all brand name covered drugs while in the “donut hole” and a 7% discount on all generics. This discount is gradually increasing (52.5% discount on brand name drugs and a 21% discount on generics in 2013) until the donut hole is completely phased out by 2020.

Beneficiaries reach their Catastrophic Coverage when their true out-of-pocket costs reach the threshold amount, which is set by Medicare each year. Drugs included on a plan's formulary and purchased through a network pharmacy count toward the costs to determine whether the beneficiary reaches catastrophic coverage. Once the out-of-pocket limit or threshold is reached, the person becomes eligible for catastrophic coverage. See more information on the Part D 50% brand name drug discount.

Drug Categories

Drugs in the same class that are used to treat a specific condition or illness such as high blood pressure, high cholesterol, heartburn, or depression.

Dual Eligibles

Medicare beneficiaries who are entitled to Medicare Part A and/or Part B and who are also eligible for full Medi-Cal benefits. They may also be referred to as Medi-Medis. More info: Medi-Cal.

Durable Medical Equipment (DME)

Medical equipment that is ordered by a doctor for use in the home. Some examples are walkers, wheelchairs, or hospital beds.

The area of law that impacts the lives of older Americans and their families. Some issues elder law attorneys address include: public benefits, probate estate planning, guardianship/conservatorship and health and long-term care planning. To find an Elder Law attorney, visit the California State Bar website.

Kidney failure that is severe enough to require ongoing dialysis or a kidney transplant. See our fact sheet available via subscription: Medicare and People with End Stage Renal Disease (ESRD) (PDF).

Enhanced Coverage (Medicare Prescription Drug Coverage)

Drug plan coverage that includes additional benefits (such as an expanded formulary) and has lower cost-sharing than standard drug plans. Enhanced prescription drug plans usually have higher premiums.

Exception (Medicare Prescription Drug Coverage)

A request for a Medicare Part D plan to cover a drug that is not in the plan’s formulary. An exception can also be requested when plans impose quantity limits, step therapy, or prior authorization. More info: Drug Coverage Appeals.

Excess Charge (for people in Original Medicare)

A charge that providers who do not accept assignment can charge. See definition of Assignment. Also called a “limiting charge,” a health care provider who does not accept assignment can charge more than the Medicare-approved amount, but not more than 15% above that amount. The beneficiary is responsible for the excess or limiting charge. Some Medigap policies offer benefits that pay the excess charge.

Expedited Appeal

An appeal of a health care decision (where a medical service is at issue) that is decided quicker than a standard appeal. In Original Medicare, a beneficiary may request an expedited appeal when receiving care in a hospital, skilled nursing facility, or comprehensive outpatient rehabilitation facility, or from a hospice or home health agency where the care is terminating soon. In Medicare Advantage or Medicare Prescription Drug plans, a beneficiary may request an expedited appeal if using the standard appeal procedure would place the beneficiary’s life, health or ability to gain maximum function in serious jeopardy. Learn more: Medicare appeals.

Explanation of Benefits (EOB)

The statement from insurance and health plans to inform enrollees how much their plan paid towards their claim(s). In Original Medicare, the Medicare Summary Notice is an EoB. Medicare Part D plans and Medicare Advantage plans that cover prescription drugs are required to provide EoB to each enrollee after he/she uses the plan to obtain prescription drugs. Medigap and retiree plans also send EoB to their enrollees to inform them how much their plan paid towards their claim(s).

An administrative process that allows a Medi-Cal beneficiary to appeal an adverse decision ("Notice of Action") made by Medi-Cal (California's Medicaid program). Federal regulation requires all state Medicaid programs to have this type of process available. A fair hearing is not a court proceeding; it is a formal proceeding in which Medi-Cal recipients may present and refute evidence, examine and cross-examine witnesses, and show why they think the decision Medicaid made was incorrect. A Hearing Officer presides over the proceeding and issues a written decision based on both evidence presented during the hearing, and federal regulation and state policy governing the Medicaid program. If required, language assistance can be requested for this type of hearing. More info: Medi-Cal Fair Hearings.

Fast-Track Appeal

An appeal process available to Medicare Advantage members if their coverage for care in a skilled nursing facility, from a home health care agency or in a comprehensive rehabilitation facility is about to end. The member in this situation has the right to request an external review from California's Quality Improvement Organization (QIO), Health Services Advisory Group (HSAG). More info: Medicare appeals.

Fee Schedule

A complete list of fees used by health plans to pay doctors or other providers.

Fee-for-service

A payment system by which a doctor, hospital, or other health care provider is reimbursed a specific amount for each service performed after a claim is submitted.

Formulary

A list of the drugs covered by a Medicare prescription drug plan (PDP) or Medicare Advantage Prescription Drug plan (MA-PD).

The period from January 1 through March 31 of each year during which people can enroll in Medicare Part A or Part B, if they did not do so when they were first eligible. They can also re-enroll if they suspended their Part A or Part B benefits. Coverage takes effect July 1.

Grievance

A complaint about the way a Medicare Advantage plan or Medicare prescription drug plan provided care. For example, beneficiaries may file a grievance if they have problems with:

The cleanliness of a health care facility

Telephone customer service

Staff behavior

Operating hours

Long wait periods for service

A grievance is not the same as an appeal. An appeal is a complaint about a plan’s determination to cover a service or item. More info: Medicare appeals.

Group Health Plan (GHP)

A health plan sponsored by an employer or employee organization that provides coverage to employees, former employees and their families. GHP coverage is usually the primary insurance and Medicare is secondary for people who are eligible for and enroll in Medicare when they turn 65, and work at a company with 20 or more employees. More info: Coverage While You and/or Your Spouse Works.

Guaranteed Issue Protections

Special rights in certain situations to buy a Medigap policy without a health screening. During these certain situations, an insurance company cannot deny insurance coverage, place conditions on a policy, or charge more for a policy because of past or current health problems. More info: Your rights to buy a Medigap policy.

Guaranteed Renewable

A term applied to Medigap and other insurance policies when the benefits cannot be changed or cancelled as long as premiums are paid. Guaranteed renewable policies are automatically renewed each year.

A program that provides free health insurance counseling and assistance to people with Medicare and pre-retirees. Trained volunteer counselors provide the counseling and assistance. HICAP is a California State Health Insurance and Assistance Program (SHIP) funded by the federal government and the California Department of Aging.

Health Maintenance Organization (HMO)

A type of Medicare Advantage Plan that has a contract with Medicare to provide all Medicare Part A and B covered services to its enrollees. HMO plans may also offer additional benefits, including Part D prescription drug coverage. Except in emergency or urgent care situations, the member must typically receive care from the HMO’s network of healthcare providers and facilities. If the member goes outside the plan to see a doctor, the HMO usually does not pay and the beneficiary is responsible for the out-of-network cost.

Health Screening

The process an insurance company uses to decide, based on medical history, whether to accept an application for insurance, whether to add a waiting period for pre-existing conditions, and how much to charge for insurance. It is also known as medical underwriting. Note: Medicare also uses the term “health screening” when referring to its preventive care and screening benefits for beneficiaries.

High-deductible Option (Medigap)

An option offered by a few insurance companies that sell Medigap policy F. The high-deductible option offers the same benefits as the standardized Medigap policy F, with a deductible of $2,110 in 2013 and a lower monthly premium. The deductible increases annually.

Home Health Agency (HHA)

An organization that provides health care services in the home. Home health care includes, but is not limited to: skilled nursing care, physical therapy, occupational therapy, speech therapy, and care by home health aides.

Home Health Care

Skilled health care and personal health aide services provided in the home on a part-time basis for the treatment of an illness or injury. Home health care is covered under Medicare Part A, if certain criteria are met, and also under Part B. Durable medical equipment may be covered when provided by a home health agency.

Hospice

A program in which a Medicare-approved public or private organization provides pain relief, symptom management, and supportive services to people whose physicians have certified that due to their terminal illness, they may have 6 months or less to live. Some home care is also covered under the Medicare Part A hospice benefit.

The period where individuals newly eligible for Medicare can join a Medicare Advantage plan. This period is 7 months: 3 months before Medicare eligibility, the month when both Part A and Part B benefits start, and 3 months after. If a person delays enrolling in Part B because he or she is covered by an employer group health plan, the ICEP is 3 months; the 3 months before both Part A and Part B benefits are effective. For example, if both Part A and Part B benefits start December 1, the 3-month ICEP starts September 1 and ends November 31.

Independent Review Entity (IRE)

The entity that performs the second review in the Medicare prescription drug benefit appeals process and in the Medicare Advantage plan appeals process. The request must be in writing and sent directly to the IRE. More info: Medicare appeals.

A 7-month period for people eligible for Medicare to enroll in Medicare Part A, Part B and/or Medicare prescription drug plan (Part D) plan. For people turning 65 years old, the 7-month period begins 3 months before the month they turn 65, and ends 3 months after the month they turn 65. For people who have a disability, the 7-month period begins 3 months before the 25th month of receiving Social Security Disability Insurance (SSDI), and ends 3 months after the 25th month of receiving SSDI. See Initial Coverage Election Period for Medicare Advantage plans (Part C), above.

Inpatient

An individual who is admitted to a hospital or other health care facility overnight for the purpose of receiving diagnosis, treatment, or other health services.

Issue Age Rating

A method of establishing a Medigap premium that is based on the age of the person when the policy is purchased. The premium does not increase automatically as the person ages; it can only increase if it is raised for all similar policies in the state.

A health plan supported by an employer or employee organization with 100 or more employees that provides coverage to employees, former employees and their families. If one is younger than age 65, eligible for Medicare because of a disability (except end-stage renal disease), and his or her spouse or designated family member works for an employer with 100 or more employees, the employer must offer that person the same health coverage as other workers, their spouses and dependents. LGHP coverage is usually primary and Medicare is secondary. More info: Coverage While You and/or Your Spouse Works.

Late Enrollment Penalty (for Medicare Part B)

If a person does not enroll in a Medicare Part B when he/she is first eligible, and does not have coverage from an employer group health plan, a penalty may be imposed if he/she enrolls in a Medicare Part B later. The penalty is 10% of the current Part B premium for every 12-month period that the person delayed enrolling in Part B. The penalty is imposed for as long as the person has Medicare Part B.

Late Enrollment Penalty (for Medicare Prescription Drug Coverage)

If a person does not enroll in a Medicare Part D plan when he/she is first eligible, and does not have creditable prescription drug coverage (see Creditable Coverage), a penalty will be imposed if he/she enrolls in a Medicare Part D plan later. The penalty is 1% of the national average premium per month for every month the person was eligible for coverage and did not sign up. The penalty is added to the premium of the Medicare Part D plan the beneficiary chooses, for as long as the person has Medicare prescription drug coverage.

Lifetime Reserve Days

Under Original Medicare, beneficiaries have an extra 60 days of hospital coverage after being in a hospital more than 90 days during a benefit period. These 60 reserve days can be used only once during a lifetime. For each lifetime reserve day, Medicare pays covered costs and the beneficiary is responsible for a daily copayment.

Also called personal care or custodial care, LTC is assistance or supervision with activities of daily living (ADL). Medicare does not generally cover long-term care.

Long-term Care Ombudsman

An advocate who resolves disputes between residents of skilled nursing homes or residential care facilities (also known as board and care, or assisted living facilities) and the facility management. An ombudsman also works to inform residents and their family members of their rights and protections while residing in a facility.

A federal assistance program that helps people pay for their prescription drug costs in a Medicare Part D or Medicare Advantage Prescription Drug plan. For people who meet the income and resource limits, the LIS helps a beneficiary pay the drug plan premiums, deductibles, coinsurance, and copayments. It is also known as Extra Help and people may apply for it through the Social Security Administration. Those who are “full duals” (receive both Medicare and full Medi-Cal coverage) receive the Extra Help automatically.

A method of conflict resolution between beneficiaries and providers regarding quality of care concerns. A professional mediator facilitates a meeting between the two parties to promote reconciliation, settlement or compromise. Health Services Advisory Group (HSAG), California's Quality Improvement Organization (QIO), administers the mediation program.

Medicaid

A joint federal and state program that helps pay medical costs for some people with low incomes and limited resources. Most health care costs are covered when a person qualifies for both Medicare and Medicaid. In California, Medicaid is known as Medi-Cal. More info: Medi-Cal.

Medicare Administrative Contractor (MAC)

A company under contract with the federal government to handle claims processing for Medicare services. There are 3 different MACs. In California, all 3 are contracted with one company, Noridian Healthcare Solutions:

A/B MAC: Processes both Part A and B claims.

DME MAC: Processes durable medical equipment (DME) claims.

HH&H MAC: Processes home health and hospice claims.

Medicare Advantage Disenrollment Period (MADP)

The MADP runs from January 1 to February 14 each year, starting in January 2011. The MADP allows a person to disenroll from a Medicare Advantage plan and return to Original Medicare. It does not, however, allow someone to switch from one MA plan to another. Nor, if one is in Original Medicare, does it allow that person to join an MA plan. If someone wants to disenroll from an MA-PD plan and return to Original Medicare during the MADP starting 2011, s/he will have a special enrollment period (SEP) to join a Part D plan. This replaces the former Medicare Advantage Open Enrollment Period (OEP) which ran from January 1 – March 31 of each year.

Medi-Cal

A joint federal and state program that helps pay medical costs for some people with low incomes and limited resources. Most health care costs are covered when a person qualifies for both Medicare and Medi-Cal. Outside of California, Medi-Cal is known as Medicaid. More info: Medi-Cal.

Medical Benefits Package

A health benefits plan available to all veterans who enroll in the Veterans Affairs (VA) health system. The plan emphasizes preventive primary care that includes a full range of outpatient and inpatient services within the VA health care system. It works independently of Medicare, Medi-Cal and other insurance programs. More info: Medicare and Veterans Administration Medical Benefits Package (PDF).

Medically Necessary

Services or supplies required for the diagnosis or treatment of a beneficiary's medical condition, which meet the standards of good medical practice and aren't just for the convenience of a beneficiary or his or her doctor.

Medicare

The federal health insurance program for people 65 years of age and older, some younger people with disabilities, people with amyotrophic lateral sclerosis (ALS) (also known as Lou Gehrig's disease), and people with end-stage renal disease (ESRD). Medicare is administered by the Centers for Medicare and Medicaid Services (CMS).

Medicare Advantage plans that also include Medicare Part D prescription drug coverage.

Medicare Appeals Council (MAC)

The entity that performs the fourth review in all the Medicare appeals processes. The request must be in writing and sent directly to the MAC. More info: Medicare appeals.

Medicare Medical Savings Account (MSA) Plan

A type of Medicare Advantage plan made up of 2 parts. One part is a high deductible health plan. The other part is a savings account into which Medicare deposits money to help pay the person’s medical bills.

Medicare Prescription Drug Coverage (Medicare Part D)

The prescription drug benefit added to Medicare as part of the 2003 Medicare Modernization Act (MMA). Benefits began January 2006 and are offered by private companies through stand-alone prescription drug plans (PDPs) or Medicare Advantage prescription drug plans (MA-PDs). Drug coverage is limited to drugs on a plan's formulary. More info: Medicare Prescription Drug Coverage.

Medicare Savings Programs

Assistance programs that help people with low income and limited resources to pay for some cost-sharing for Medicare–covered benefits. There are 4 programs: Qualified Medicare Beneficiary (QMB), Specified Low-income Medicare Beneficiary (SLMB), Qualified Individual (QI), and Qualified Disabled Working Individual (QDWI) and are administered by the Department of Health Care Services in California. More info: Medicare Savings Programs.

Medicare SELECT

A type of Medigap plan that may require a person to use doctors and hospitals within its network to be eligible for full benefits with lower out-of-pocket costs.

Medicare Summary Notice (MSN)

A notice or statement listing the services or items received by a beneficiary in Original Medicare. The MSN provides information about the health care provider who provided the service or item and what was paid. Most beneficiaries receive their MSN by mail once a quarter, or every 90 days. You can also access your MSN in real-time by signing up on mymedicare.gov, Medicare’s secure online service for personalized information. The MSN summarizes:

Your claims and costs this period;

Whether Medicare approved or denied services;

Providers with claims;

Your deductible status; and

Medicare Preventive Services.

People enrolled in Medicare Advantage plans do not receive a Medicare Summary Notice but do receive an Explanation of Benefits from the MA plan. See Explanation of Benefits.

Medigap

Formally called Medicare supplement insurance, a Medigap policy supplements Original Medicare by paying some or all Medicare deductibles and coinsurance, depending on which plan the beneficiary buys. There are 10 nationally standardized Medigap policies (plans A, B, C, D, F, G, K, L, M and N) offered as of June 1, 2010. In addition to covering Medicare out-of-pocket costs, some plans cover services not covered by Original Medicare, such as limited coverage while traveling outside the United States. More info: Medigap.

More commonly referred to as Community Rating, No Age Rating is a method used by Medicare supplement insurance (Medigap) plans to determine the premium. See the definition for Community Rating.

Non-participating Provider (for people in Original Medicare)

A doctor or supplier who may not accept assignment on all Medicare claims. (See Assignment.) A non-participating provider may accept assignment on a case-by-case basis. If a non-participating provider decides not to accept assignment for a service, he/she may charge the patient more but not 15% over the Medicare-approved amount. (See Excess Charge.)

Non-Tax Qualified (NTQ)

A type of long-term care insurance policy in which the premiums are not tax deductible (as opposed to a tax-qualified policy). NTQ policies may pay benefits using a more generous threshold than tax-qualified policies, or include additional ways to trigger benefits. For example, an NTQ policy can begin paying benefits when a person is unable to perform 2 out of 7 activities of daily living (ADLs). Tax-qualified policies only pay if a person is unable to perform 2 out of 6 ADLs. More info: Long-Term Care Insurance: An Overview.

A one-time, 6-month period when a Medicare beneficiary may apply for a Medigap and not be refused. The 6 months starts when both Medicare Parts A and B become effective. During this period, a Medigap insurer may not decline the application, require health screening, or charge extra because of health history. In California, beneficiaries younger than 65, who have Medicare due to a disability, have an Open Enrollment period to apply for one of 5 Medigap policies. However, this Open Enrollment period does NOT apply to people under 65 who have kidney failure, also known as end-stage renal disease (ESRD). When Medicare beneficiaries with a disability turn 65, regardless of whether they have end-stage renal disease, they qualify for a new Open Enrollment period and have the opportunity to buy one of the 10 Medigap policies without a health screening.

Refers to Medicare Part A: Hospital Insurance, and Medicare Part B: Medical Insurance. (Note: Part C (Medicare Advantage) and Part D are both offered by private insurance companies or health plans.) Original Medicare (Parts A and B) is a fee-for-service program provided by the federal government.

Out-of-Area Care

Health care received while outside the geographic service area of a Medicare Advantage managed care plan. Typically, prior approval is needed from the primary care provider before the plan will pay for out-of-area care, except in emergencies. Note: out-of-area differs from out-of-network in that the former refers to a geographical area that is outside of the area the plan serves. The latter refers to providers that may be within the plan’s geographical area of service but not within their group of contracted providers.

Out-of-Network Providers

Doctors and other health care providers who are not contracted to offer services with a specific Medicare Advantage plan, such as an HMO or PPO. Also referred to as non-preferred providers.

Outpatient

An individual who receives treatment at a hospital or clinic but is not admitted as an inpatient.

The part of Original Medicare also called hospital insurance that covers inpatient hospital stays, hospice care, home health care, and care provided in skilled nursing facilities. More info: Part A.

Part B

The part of Original Medicare also called medical insurance that covers doctors' services and outpatient care. Some of the other covered services include X-rays, medical equipment, and limited ambulance service. More info: Part B.

A doctor or supplier who agrees to accept assignment on all Medicare claims, meaning they agree to accept Medicare’s approved amount as payment in full. (See Assignment) These doctors and suppliers may bill the patient or patient’s supplemental insurance for Medicare deductibles and/or coinsurance amounts.

Patient Assistance Programs

Discount programs offered by pharmaceutical companies to people with low incomes who take some of the drugs that they manufacture.

An option in some Medicare Advantage HMO plans that allows members to use doctors and hospitals outside the plan’s network, for an additional cost.

Pre-existing Condition

A health problem diagnosed or treated before health insurance is purchased. Usually, for the condition to be considered pre-existing, the condition must have been diagnosed or treated during the last 6 months before health coverage became effective.

Pre-Existing Condition Insurance Plan (PCIP)

A federally-funded program resulting from the Affordable Care Act of 2010. The PCIP offers health coverage to people who are not yet eligible for Medicare, have been denied health coverage due to a pre-existing condition, and haven't had any coverage in the 6 months before applying. In California, the PCIP is run by the Managed Risk Medical Insurance Board (MRMIB). More info: PCIP website.

Preferred Provider Organization (PPO)

A type of Medicare Advantage managed care plan that encourages members to use doctors, hospitals, and other providers that belong to the plan’s network. Although members may see providers outside the network, the copayment is lower if members use network providers than providers outside the network.

Premium

A periodic or monthly payment made to Medicare, an insurance company, or health care plan for health care coverage.

Prescription Drug Plans (PDPs)

Plans offered by private companies that provide Medicare Prescription Drug Coverage (also known as Part D). Plans differ in monthly premiums, drugs covered, cost-sharing amounts and in their networks of participating pharmacies.

A physician, medical doctor or general practitioner who is the first contact for a person with a health concern, who helps in identifying or preventing illness or disability, and who provides continuing care. Managed care plans require their members to choose a primary care provider, who first checks a patient’s health problems and coordinates care with other doctors, specialists, and therapists. In managed care, a PCP is sometimes referred to as a "gatekeeper."

Primary Payer

An insurance policy, plan or program that pays first on a claim for medical care. In most cases, Medicare is the primary payer for Medicare beneficiaries. However, in some situations, such as when a beneficiary is still working and covered by their employer's health plan, worker’s compensation, liability insurance and no-fault insurance, Medicare may be the secondary payer.

Private Fee-for-Service (PFFS) Plans

A type of Medicare Advantage plan. Unlike HMOs, beneficiaries in PFFS plans are not required to use a network of providers. They can see any provider who accepts Medicare and agrees to accept payment from the PFFS plan. In this type of plan, the providers do not bill Medicare for services. Instead, they must bill the PFFS plan, which then pays the claims using the funds they receive from Medicare on a monthly basis. Services covered by the plan usually require a copayment or, in some cases, require the member to pay a percentage of the Medicare-approved amount.

Program for All-Inclusive Care for the Elderly (PACE)

A program that combines medical, social and long-term care services to help older people stay independent and living in their community as long as possible, while getting the high-quality care they need. To be eligible, a person must be:

Age 55 or over

A resident of the PACE service area

Certified as eligible for nursing-home care by the appropriate state agency

Able to live safely in the community

Provider

An individual or facility, such as a doctor or hospital, that is licensed and certified by the State of California to provide health care services.

Provider Sponsored Organization (PSO)

A type of managed care plan in which a group of doctors, hospitals, and other health care providers form a network to provide health care to Medicare beneficiaries for a set amount of money from Medicare every month. These plans are run by the doctors and providers themselves, and not by an insurance company.

An assistance program available to people who had Social Security and Medicare because of disability, but who have lost their Social Security benefits and free Medicare Part A because they returned to work and their earnings exceed the limit allowed. The QDWI program pays the Part A premium if an individual meets certain qualifying criteria. (See Medicare Savings Programs.)

Qualified Independent Contractor (QIC)

The entity that performs the second review in the Medicare Part A and B appeals process. The request for this review must be in writing and sent directly to the QIC. More info: Medicare Part A and B appeals.

Qualified Individual (QI)

An assistance program that pays the Medicare Part B premiums for individuals who have Medicare Part A and meet certain income and resource (or asset) limits. The QI program has higher income limits than the SLMB and QMB programs. See Medicare Savings Programs. More info: QI.

Qualified Medicare Beneficiary (QMB)

An assistance program for people who qualify for Medicare and meet certain income and resource (or asset) limits. The QMB program pays the Medicare Part A and Part B premiums, and Medicare deductibles and cost-sharing amounts for services covered by Medicare. See Medicare Savings Program. More info: QMB.

Measurements of how well the health plan and care providers are doing at keeping their members healthy or treating them when they are sick. High-quality health care means providing the right care at the right time and in the right way for the patient, and getting the best possible results.

Quality Assurance

The process of looking at how well medical services are provided. The process may include formally reviewing health care given to a person, or group of persons, locating the problem, correcting the problem, and then checking results to see if the treatment or therapy was successful.

Quality Improvement Organization (QIO)

An organization that has a contract with the federal government to check and improve the care given to Medicare patients. QIOs are private, mostly not-for-profit organizations, which are staffed by professionals, mostly doctors and other health care professionals, who are trained to review medical care and help beneficiaries with complaints about the quality of care. A couple examples of poor quality care that beneficiaries can report to the QIO include: 1) receiving the wrong medication or an overdose, or 2) receiving a misdiagnosis or unnecessary surgery or diagnostic testing. For California, Livanta is the Quality Improvement Organization.

The Railroad Retirement Act provided retirement and disability annuities to railroad workers with at least 10 years of service. The Railroad Retirement Board is a federal agency that administers a social insurance program that provides retirement, survivor, unemployment, and sickness benefits to U.S. railroad workers and their families.

Reconsideration

A review at the second level in the appeals process for Medicare Part A, B and D claims. The same word is used for the first level of appeal for Medicare Advantage claims. For Part A and B claims, this step is a review by the Qualified Independent Contractor (QIC). (California's QIC is First Coast Service Options ). For Part D claims, this step is a review by the Independent Review Entity (IRE). (California's IRE is MAXIMUS Federal Services ). For Medicare Advantage (Part C) claims, a beneficiary may appeal the plan’s organization determination by asking for a reconsideration. See Organization Determination. More info: Medicare Appeals.

Redetermination

The first level in the appeals process for Medicare Part A, B or D claims that have been denied. In Original Medicare, if a beneficiary doesn’t agree with Medicare's initial determination for a Part A or B claim (stated on the Medicare Summary Notice, see Medicare Summary Notice), s/he must submit a written, signed request to appeal within 120 days of the determination. The MSN directs the beneficiary where and how to file the request for a redetermination. In Medicare Part D, if a beneficiary doesn’t agree with the plan's coverage determination for his or her Part D claim, s/he must submit a written request to appeal within 60 days of the determination. More info: Medicare Appeals.

Residential Care Facility for the Elderly (RCFE)

Licensed facilities that provide residents with meals, supervision, and assistance with activities of daily living, such as bathing and dressing. RCFEs may also provide incidental medical services under special care plans. All assisted living facilities have RCFE licenses, as do certain retirement homes and board and care homes that provide these services.

RCFEs provide services to people age 60 and over, and people younger than age 60 with comparable needs. RCFEs can range in size from 6 or fewer beds to more than 100 beds. The residents in these facilities require varying levels of personal care and protective supervision. Because of the wide range of services offered by RCFEs, one should review the programs of each facility to be sure the services meet the needs of the prospective resident.

Respite Care

Short-term care covered in the hospice benefit under Medicare Part A. Respite care provided to the hospice patient relieves the caregiver (usually a family member). For Medicare to cover, respite care must be provided in a Medicare-approved facility, such as a hospice inpatient facility, hospital or nursing home.

The geographic area where a health plan operates and accepts members. A Medicare Advantage plan may operate only within its service area, and only Medicare beneficiaries who reside in the plan’s service area may enroll in that plan. A Medicare Advantage plan must disenroll those who have moved out of the plan's service area for more than 6 months.

Secondary Payer

An insurance policy, plan or program that pays after the primary payer pays on a claim for medical care. This could be Medicare (for example, when a beneficiary is still working and has an employer-sponsored health plan as primary coverage), Medi-Cal (California's Medicaid program) or other insurance, depending on the situation.

Share of Cost (Medi-Cal)

The amount of money a person must pay or incur in medical services in a given month before receiving Medi-Cal benefits. A share of cost is like an insurance deductible. People on Medi-Cal with a share of cost must meet the resource limits for Medi-Cal ($2,000 for an individual and $3,000 for a couple) but may have incomes above the monthly income limits. More info: Medi-Cal with a Share of Cost.

Skilled Nursing Care

A high level of care including services that can only be performed safely and correctly by a licensed nurse (either a registered nurse or a licensed practical nurse) or therapist (such as physical, speech or occupational).

Skilled Nursing Facility (SNF)

A licensed nursing facility with the staff and equipment to give skilled nursing care and/or skilled rehabilitation services, and other related health services.

The federal government agency that administers Social Security benefits for all working and retired Americans. It also determines whether an individual is eligible for Medicare Parts A and B and is responsible for the enrollment process in Parts A and B. SSA distributes Medicare cards to beneficiaries and is responsible for administering the Low Income Subsidy ("Extra Help") available to people who meet certain income and asset (or resource) limits to help pay for Medicare Prescription Drug Coverage.

Social Security Credits

The amount of time in which an individual earns income. The amount in earnings needed to obtain one credit is $1,120 in 2010 and it increases each year. Social Security awards one credit per quarter of earnings, up to a maximum of 4 credits each year. Most people require 40 credits (which takes 10 years to accumulate) to be eligible for Medicare benefits, although disability or survivor benefits may require fewer credits.

Social Security Disability Insurance (SSDI)

Cash payments (in the form of monthly income) issued by the Social Security Administration to individuals who are unable to do any kind of work because they have a medical condition that is expected to last at least 12 months or result in death. (A person may have a disabling condition, but not meet the Social Security definition of disabled.) Individuals qualify for Medicare if they have been eligible for SSDI benefits for at least 24 months. However, people with amyotrophic lateral sclerosis (ALS) (also known as Lou Gehrig's disease) are eligible for Medicare beginning with the first month of their eligibility for SSDI.

Special Election Period

A set time period triggered by certain events during which a beneficiary can change Medicare Advantage plans, Medicare prescription drug plans or return to Original Medicare. Examples of these events include: a member moving outside the plan’s service area; a Medicare Advantage plan violating its contract with a member; a plan not renewing its contract with the federal government; or other exceptional conditions. A Special Election Period is different from the Medicare Part B Special Enrollment Period. More info: SEPs.

Special Enrollment Period

A set time when people can sign up for Medicare Part B if they did not take Part B during their Initial Enrollment Period because they had group health plan coverage through an employer or union. They can sign up for Medicare Part B at any time while they are covered under the group plan. When the employment or group health coverage ends, they have 8 months to sign up. The 8-month Special Enrollment Period starts the month after employment ends or the group health coverage ends, whichever comes first. The Special Enrollment Period is different from Special Election Periods for Medicare Advantage (Part C) and Part D plans.

Special Needs Plan (SNP)

A type of Medicare Advantage (MA) plan designed for certain populations. For example, an SNP may limit its enrollment to people in certain long-term care facilities (like a nursing home), people who are eligible for both Medicare and Medi-Cal ("dual eligibles"), or people with certain chronic or disabling conditions. The goal of these plans is to provide coordinated health care and services to those who can benefit the most from the expertise of the plans' providers and focused care management. All SNPs must provide Medicare prescription drug coverage.

Specified Low-income Medicare Beneficiary (SLMB)

An assistance program that pays for Medicare Part B premiums for individuals who have Medicare Part A, and meet certain incomes and resource (or asset) limits. The SLMB program has higher income limits than Qualified Medicare Beneficiary (QMB) program. See Medicare Savings Programs. More info: SLMB.

Standard Coverage (Medicare Prescription Drug Coverage)

The basic benefit package that must, at a minimum, be offered by Medicare prescription drug plans, which includes a set deductible, formulary, and copayment structure. Some prescription drug plans may offer enhanced benefits in addition to the standard coverage. More info: Medicare Prescription Drug Overview.

Standardized Plans

Standardized Medicare supplement insurance plan are called Medigap plans. Each plan type (designated by a letter) has the same benefits, regardless of which company sells it. There are currently 10 standardized plans that can be sold: A, B, C, D, F, G, K, L, M and N. More info: Chart of Medigap plans A-N.

Suppliers

Individuals, agencies, or companies (aside from doctors or hospitals) that provide medical equipment or services. Some examples are ambulance companies, medical equipment rental businesses, and laboratories.

Supplemental Security Income (SSI)

An income program administered through Social Security, which provides monthly payments to people who are 65 or older, blind and/or disabled and have limited incomes and resources. A person can be eligible for SSI even if s/he has never worked or paid taxes. A person can also be eligible for SSI while receiving social security benefits. SSI is designed to supplement the limited monthly income a person already receives, up to an amount adjusted annually by the state. Generally, to be eligible for SSI payments one must be a U.S. citizen or meet certain requirements for non-citizens. In California, a person with SSI automatically qualifies for full Medi-Cal. More info: Medi-Cal.

A type of long-term care insurance policy in which the premium is tax deductible (as opposed to a non-tax qualified policy). Individuals can deduct their TQ premiums from their federal and state income taxes as medical expenses, up to a specified amount. The amount that can be deducted is based on the policy-holder’s age and can be combined with any medical expenses for an amount that exceeds 7.5% of one’s adjusted gross income. Also, benefits paid under these policies are not taxed as income. Note: Benefit triggers for these policies are more restrictive than those for non-tax qualified policies. More info: Long-Term Care Insurance: An Overview.

TRICARE

The health care program administered by the Department of Defense for members of the military, their spouses, eligible dependents, and military retirees. TRICARE was formerly called the CHAMPUS program. More info: TRICARE.

TRICARE for Life

The program administered by the Department of Defense which supplements Medicare coverage for military retirees, their spouses and other qualified dependents who are entitled to Medicare Part A and enrolled in Part B. More info: People with Medicare and TriCare for Life (PDF).

A department of the federal government that provides benefits, including health care coverage to US military veterans and their families. More info: VA health benefits.

Voluntary Enrollee

An individual who does not automatically qualify for Medicare under the main categories: 65 or older and receiving Social Security or Railroad Retirement benefits or under 65 and receiving Social Security Disability benefits for more than 24 months. Voluntary enrollees must be 65 or older and U.S. citizens or legal permanent residents who have been in the United States for 5 continuous years or more. A Voluntary Enrollee can buy into Medicare Parts A and B, but will have to pay a high monthly premium, which increases annually. Note: the Medicare Savings Programs can pay the Medicare premiums for people who qualify because of low incomes and limited resources. More info: Medicare Savings Programs.

The time during which an insurance company selling Medicare supplement insurance (Medigap policies) is not required to pay benefits for a pre-existing condition that the insured beneficiary has. (See Pre-existing Condition) The waiting period begins on the effective date of the policy and cannot last longer than 6 months. If the insured beneficiary had health coverage during the 6 months prior to the effective date of the policy, the insurance company must give the insured credit for such coverage. Learn more: Medigap.